Microsoft's Surface Strategy: A Tragedy Of Errors For Channel

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There's no polite way to say this anymore: Microsoft is out of touch, out of line and out of excuses.

Since it was first unveiled last summer, the company's go-to-market strategy for Surface tablets has been a thorn in the side of the channel and a blight on Microsoft's channel reputation. It started with Microsoft's baffling decision to sell Surface and Surface Pro devices through retail only, first through Microsoft Stores and then through select retail partners like Best Buy, Staples and Frye's.

Over the last two weeks, the situation worsened; Microsoft made a mockery of its channel strategy with its new plan to bring Surface to the channel via the Microsoft Devices Program. A mess of contradictory decisions and statements has provided a mountain of evidence that Microsoft has lost its grasp not only on the basics of channel economics but also the value of the solution provider partner.

A week before its 2013 Worldwide Partner Conference, the company announced the Microsoft Devices Program and formed distribution pacts with Ingram Micro, Tech Data and Synnex to provide Surface tablets to solution providers -- yet Microsoft authorized just 10 large account reseller (LAR) partners to actually sell the devices.

There were so many things wrong with this decision that it's hard to know where to begin. But, let's start with the distribution partnerships; why use the "Big Three" IT distributors if you're not going to take advantage of their vast customer bases? Why use a mass market distribution play if you're going to have such a narrow go-to-market window?

And then there's the LAR issue; Microsoft partners big and small are smarting over Microsoft's decision to bypass them in favor of big DMR shops like CDW, Insight and PC Connection. And what's more, solution providers interested in selling Surface may have to resort to buying the devices from some of the largest competitors.

2. Murky Expansion Plans

Microsoft also held a media conference call about its new Surface program but couldn't provide any detailed information beyond the talking points contained in the official press release. During that call, Jenni Flinders, vice president of Microsoft's U.S. Partner Group, said Microsoft employed a "rigorous process" to select the 10 partners for Authorized Surface Reseller status and that the company would expand the Microsoft Devices Program in the "coming months."

3. Surface No Show At WPC

A week later, after considerable criticism from Microsoft partners about its latest Surface move, the software giant kicked off its WPC event in Houston, where it offered attendees both the Surface and Surface Pro tablets at steep discounts. But when Microsoft CEO Steve Ballmer took the stage for his opening session keynote, he didn't even mention the devices program or Surface availability for the channel. Instead, Ballmer encouraged partners at the event to explore the tablets and "pick one up."

Following Ballmer's address, Tami Reller, Microsoft's chief marketing officer and chief financial officer for Windows, took the stage and hyped the Surface, calling the tablets a superior option for business users compared to the iPad. Yet, there was still no word about when partners in the audience could sell those business tablets to their commercial customers, or when Microsoft plans to increase the number of Surface reseller authorizations.